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A list of financial aid resources
August 31, 2004

Minneapolis, Minn. — Some of the resources for students of all incomes looking for financial aid to help pay for higher education.

GRANTS:

- Pell Grant. The federal government's largest grant program for low- and moderate-income families, sending $167 million to 76,500 undergraduates at Minnesota schools in the 2003 fiscal year.

- Supplemental Educational Opportunity Grant: A federal program that can provide additional money to students demonstrating financial need. Priority is given to students already receiving a Pell Grant.

- Minnesota State Grant: Helps students from low- and moderate-income families. The grant is based on a "shared responsibility" formula that looks at the total price of attending a specific college, including tuition and fees, room and board, books and supplies, transportation and other expenses.

A student is required to use income, loans, savings or other award money to cover at least 46 percent of the price of attendance. The remaining 54 percent is met through a contribution from the parents, and the federal Pell Grant and State Grant awards.

The maximum award in 2004-05 ranges from about $4,800 at a public technical college to $7,662 at a private four-year college. The average award is about $1,845.

LOANS:

- Loan programs include the Federal Perkins Loan, the Federal Stafford and the Federal Ford Direct Loan Programs, Federal Parent Loans for Undergraduate Students, and others. The state also offers a loan program.

WORK STUDY:

- The state and federal governments offer work study programs to students of need. The school's financial aid office determines how many hours a student is eligible to work. Most students average about 15 hours a week and may earn $3,000 or more per year.

TAX INCENTIVES:

- Hope Tax Credit: A federal individual income tax credit of up to $1,500 for tuition and related expenses for each eligible student.

- Lifetime Learning Tax Credit: A federal individual income tax credit of 20 percent of the first $10,000 of qualified and related expenses.

- Student Loan Interest Deduction: Individuals may be able to deduct up to $2,500 of the interest paid on student loans.


SAVINGS:

- Minnesota College Savings Plan: Individuals at any income level can contribute to the plan, and account earnings are free from federal and state income taxes when withdrawn to pay the beneficiary's qualified higher education expenses. Individuals who meet certain requirements may qualify for a matching grant from the state. www.mnsaves.org

- Coverdell Education Savings Account, formerly the Education IRA: Earnings on a Coverdell ESA grow tax-free until withdrawn to pay for qualified expenses.


SCHOLARSHIPS and OTHER RESOURCES:

Education officials warn students to be wary of any scholarship search programs that guarantee a scholarship or ask for credit card or checking account data. Some useful Web sites include:

-CollegeNet Mach 25
-FastWeb.com
-Marine Corps Scholarship Foundation
-NCAA Scholarships and Internships
-ROTC Military Scholarships

Source: Minnesota Higher Education Services Office

(Copyright 2004 by The Associated Press. All Rights Reserved.)

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